Jersey City’s Provident Financial Services (NYSE: PFS) Monday signed a definitive agreement Monday to buy Woodbridge-based First Sentinel Bancorp (Nasdaq: FSLA) for $642 million in stock and cash.

Under the terms of the agreement, 60% of First Sentinel common shares will be converted into Provident stock and the remaining 40% will be converted into cash.

First Sentinel stockholders will have the option to receive either 1.092 shares of Provident Financial common stock, $22.25 in cash, or some combination thereof. The combined bank will rank as the eighth largest in New Jersey with deposits of approximately $4.1 billion. Upon completion of the transaction, Provident will also rank as the fourth largest bank in Middlesex County.

Provident will boast $6.4 billion in assets and 76 branches in 10 counties throughout New Jersey.

The agreement has been approved by the boards of directors of both Provident Financial and First Sentinel. The transaction is subject to stockholder and regulatory approvals and is expected to close at the end of the second quarter of 2004. After the transaction is completed, Christopher Martin, First Sentinel’s CEO and president, will be named president of Provident Financial Services and The Provident Bank, and Paul M. Pantozzi, Provident Financial’s chairman, CEO and president, will continue in the positions of chairman and CEO of both the holding company and the bank.

Lehman Brothers served as financial advisor and Luse, Gorman, Pomerenk and Schick served as legal counsel to Provident Financial. Sandler O”Neill & Partners served as financial advisor, and Thacher Proffitt & Wood served as legal counsel to First Sentinel.

Incorporated in 2002, Provident Financial Services is the holding company for The Provident Bank, which operates 54 full-service branches in Hudson, Bergen, Essex, Mercer, Middlesex, Monmouth, Morris, Ocean, Somerset and Union counties.

First Sentinel Bancorp, was organized in 1998 by First Savings Bank for the purpose of holding all of the capital stock of the bank. The bank operates 22 branches in central New Jersey –18 in Middlesex County, two in Monmouth County, one in Somerset County and one in Union County.At the close of trading, shares of Provident Financial were down $1.19 to $19.18, while First Sentinel shares rose $2.56 to $21.34.